OPERATIONAL GUIDANCE ON OPERATIONAL CONTINUITY IN …

1 OPERATIONAL GUIDANCE ON OPERATIONAL CONTINUITY IN resolution November 2021 update Single resolution Board Treurenberg 22 B-1049 Brussels, Belgium T +32 2 490 30 00 E @EU_SRB Disclaimer: This publication sets out some of the main factors that banks are expected to consider when implementing the OPERATIONAL CONTINUITY expectations, in order to effectively implement the resolution strategy from an OPERATIONAL point of view and, consequently, to stabilise and restructure the bank. In a crisis, depending on the specific situation and in line with the applicable legal framework, the SRB reserves the right to deviate from actions and expectations described in this publication.

2 This publication is not intended to be legally binding and does not in any way substitute or amend the legal requirements laid down in the relevant applicable European Union (EU) and national laws. It may not be relied upon for any legal purposes, does not establish any binding interpretation of EU or national laws and does not serve as or replace legal advice. This OPERATIONAL GUIDANCE may be subject to further revisions, including due to changes in the applicable EU legislation. The SRB reserves the right to amend this publication without notice whenever it deems it appropriate. The content of this publication shall not predetermine the position that the SRB may take in specific cases, where the circumstances of each case will also be considered.

3 The document has been developed by the SRB, in close collaboration with the National resolution Authorities (NRAs). Single resolution Board Treurenberg 22 B-1049 Brussels, Belgium T +32 2 490 30 00 E @EU_SRB Table of contents Abbreviations 3 1. Purpose and objectives 4 2. Scope of application and phase-in 5 3. OPERATIONAL GUIDANCE 6 Introduction 6 Service identification and mapping 7 Service identification .. 7 Mapping interconnectedness for OPERATIONAL CONTINUITY .. 10 Assessment of OPERATIONAL CONTINUITY risk 10 Mitigating actions and preparedness measures 12 Adequate documentation .. 12 resolution -resilient features contractual provisions.

4 13 resolution -resilient features alternative mitigating actions .. 15 Measures to ensure financial resilience of unregulated intra-group service providers .. 16 Measures to ensure that relevant roles are adequately staffed .. 19 Adequate MIS 25 Service catalogue .. 26 Repository of relevant contracts .. 26 Inventory of relevant OPERATIONAL assets and database of relevant 27 Governance arrangements 27 ANNEX I: LIST OF THE MINIMUM FIELDS TO BE INCLUDED IN THE REPOSITORY OF CONTRACTS 29 Essential fields 29 Additional fields 30 ANNEX II: INVENTORY OF RELEVANT OPERATIONAL ASSETS AND DATABASE OF RELEVANT STAFF 31 List of minimum information to be included in the inventory of relevant OPERATIONAL assets 31 Glossary 32 Single resolution Board I OPERATIONAL GUIDANCE on OPERATIONAL CONTINUITY in resolution | 3 Single resolution Board Treurenberg 22 B-1049 Brussels, Belgium T +32 2 490 30 00 E @EU_SRB Abbreviations BRRD Bank Recovery and resolution Directive BU Banking Union CBL Core business line CF Critical function CIR Templates resolution reporting templates provided for under Annex I of Commission Implementing Regulation (EU)

5 2018/1624 EBA European Banking Authority EfB SRB s Expectations for Banks EU European Union FMI Financial market infrastructure FSB Financial Stability Board IRT Internal resolution team MIS Management information system NRA National resolution authority OCIR OPERATIONAL CONTINUITY in resolution SLA Service level agreement SRB Single resolution Board SRMR Single resolution Mechanism Regulation TSA Transitional service agreement UIG Unregulated intra-group service providers Single resolution Board I OPERATIONAL GUIDANCE on OPERATIONAL CONTINUITY in resolution | 4 1. Purpose and objectives As outlined in the Expectations for Banks (EfB), OPERATIONAL CONTINUITY in resolution (OCIR) refers to the ability to effectively implement, from an OPERATIONAL point of view, the resolution strategy and, consequently, to stabilise and restructure the bank.

6 To achieve this, banks are expected to: a) identify all relevant ( critical and essential) services, as well as underlying relevant OPERATIONAL assets and staff/roles, and map them to the legal entities, providers and recipients, core business lines (CBLs) and critical functions (CFs) (mapping interconnectedness for OPERATIONAL CONTINUITY )1; b) ensure that relevant contractual arrangements with both third-party and intra-group legal entity providers are clearly and comprehensively documented, kept up to date, and are mapped to relevant services2; c) assess the OPERATIONAL CONTINUITY risks in resolution , such as the interruption of relevant services, loss of access to relevant OPERATIONAL assets and unavailability/vacancy of relevant staff/ roles3; d) mitigate the identified OPERATIONAL CONTINUITY risks by putting in place appropriate OPERATIONAL arrangements ( resolution -resilient service contracts)4; e) have in place cost and pricing structures for services which are predictable, transparent and set on an arm s length basis5; f) ensure the financial resilience of service providers6.

7 G) have in place management information system (MIS) capabilities that provide timely access to the up-to-date information needed to identify potential OPERATIONAL CONTINUITY risks to resolution , and to carry out separability and restructuring ( repository of the contracts governing provision of the relevant services)7; h) ensure adequate governance arrangements for OCIR purposes ( resolution planning and execution)8. This GUIDANCE is provided to assist banks in achieving resolvability in line with the dimensions set out in the EfB, with the aim of achieving the bank s preparedness for a potential resolution . It is intended to provide additional OPERATIONAL GUIDANCE for banks9 on areas of OCIR included in the EfB and as detailed in the yearly dedicated priorities letters sent by the SRB to banks under its remit.

8 1 EfB Principle 2 Ibid. 3 EfB Principle 4 EfB Principle 5 Ibid. 6 Ibid. 7 EfB Principle 8 EfB Dimension , particularly Principle 9 The SRB is the resolution authority for: the entities and groups directly supervised by the European Central Bank (ECB); and other cross- border groups, groups that have entities established in more than one participating Member State, hereinafter referred to as banks . Single resolution Board I OPERATIONAL GUIDANCE on OPERATIONAL CONTINUITY in resolution | 5 2. Scope of application and phase-in In line with the scope of the EfB, this OPERATIONAL GUIDANCE is aimed at banks within the SRB remit for which the strategy is resolution .

9 Also in line with the EfB, while the OPERATIONAL GUIDANCE is general in nature, its application to each bank may be adapted to individual specificities, taking into account the proportionality principle, and based on a dialogue between each bank and its IRT. The GUIDANCE included in the following chapters is not exhaustive and may be subject to further SRB communications related to resolvability requirements for banks. In this context, IRTs may also request information and analysis on specific topics in addition to this GUIDANCE , when relevant to progress in resolution planning and for the purpose of improving the resolvability of the bank throughout the respective resolution planning cycle.

10 The EfB will be subject to a gradual phase-in according to the general phase-in dates reported in Chapter 3 of the EfB. This also applies to OCIR expectations, which are expected to be fully met by the end of 2023. Whilst the objective of CONTINUITY of critical functions is prioritised, as outlined in the EfB, banks are also encouraged, where not already doing so, to work towards meeting the OCIR expectations that will be a priority at a later stage. The table below presents an indicative timetable supporting the phase-in: IRTs may bilaterally agree on alternative phase-in dates, taking into account bank-specific features and circumstances, as appropriate.